Assistant Commissioner of Income-tax, V. Scope T & M Private Ltd., Pune

ITA 458/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1804 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-05-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 07-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ANIL CHAWARE
• Keywords: Business expenditure; Additional evidence
• Section: 143(3); 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , !, # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.458/PN/2014 ASSESSMENT YEAR : 2008-09 THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 6, PUNE. . APPELLANT VS. SCOPE T & M PVT. LTD., FLAT NO.1, BUILDING NO.4, LAL BAHADUR SHASTRI, LOKMANYA NAGAR, PUNE 411 033. PAN : AABCS5002J . RESPONDENT / APPELLANT BY : SHRI ANIL CHAWARE / RESPONDENT BY : SHRI ANIL SATHE & SHRI PRASHANT CHAPEKAR / DATE OF HEARING : 23.05.2016 / DATE OF PRONOUNCEMENT: 27.05.2016 % / ORDER PER PRADIP KUMAR KEDIA, AM : THE CAPTIONED APPEAL FILED BY THE REVENUE IS AGAINST TH E ORDER OF CIT(A)-III, PUNE DATED 11.12.2013 RELATING TO ASSES SMENT YEAR 2008-09 PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (I N SHORT THE ACT). 2. THE SOLITARY ISSUE THAT ARISES IN THE APPEAL OF THE REVENUE FOR CONSIDERATION IS ALLOWABILITY OF COMMISSION EXPENSE S OF RS.1,09,65,073/- TO M/S INTEGRATED TECHNOLOGY SOLUTIONS PRIVATE LIMITED . THE REVENUE HAS IMPUGNED THE ACTION OF THE CIT(A) IN ALLOWING THE A FORESAID COMMISSION PAYMENT AS BUSINESS EXPENDITURE. 2 ITA NO.458/PN/2014 3. BRIEFLY STATED, THE RELEVANT FACTS CONCERNING TH E ISSUE ARE THAT THE ASSESSEE IS A DOMESTIC COMPANY ENGAGED IN THE BUSIN ESS OF MANUFACTURING AND TRADING OF PORTABLE TESTING AND MEASURING INSTRUMEN TS FOR POWER SECTOR. DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2008-09, THE ASSESSEE HAS PAID CERTAIN AMOUNT AS COMMISSION TO VARIOUS PARTIE S FOR PROCUREMENT OF BUSINESS ORDER. HOWEVER, THE ASSESSING OFFICER REJ ECTED THE GENUINENESS OF TRANSACTIONS IN RESPECT OF ONE OF SUCH PARTY NAMELY M/S INTEGRATED TECHNOLOGY SOLUTIONS PRIVATE LIMITED (ITSPL). IT WAS NOTED BY THE ASSESSING OFFICER THAT IN THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD INTER-ALIA CLAIMED EXPENDITURE AMOUNTING TO RS.1,09,65,073/- ON ACCOUN T OF COMMISSION PAID TO ITSPL. THE BENEFICIARY OF THE COMMISSION IS ITSPL HAVING ADDRESSED AT 3 RD FLOOR, NIRLON HOUSE, DR. ANNIE BESANT ROAD, WORLI, MUMBAI 40030. IN SUPPORT OF ITS CLAIM OF HAVING CARRIED OUT BUSINESS TRANSACTIONS WITH THE SAID CONCERN, THE ASSESSEE FURNISHED CERTAIN DOCUMENTARY EVIDENCES SUCH AS BILLS ISSUED BY THE ITSPL TO THE ASSESSEE IN RESPECT OF O RDERS PROCURED BY IT AND ALSO LETTER WRITTEN BY THE CHAIRMAN OF THE SAID COMPANY FOR RETAINERSHIP OF AGENCY FOR THE FINANCIAL YEAR 2007-08. THE COMMISSION WAS CLAIMED TO HAVE BEEN PAID AT THE RATE OF 17.5% OF THE GROSS SALES. IN O RDER TO VERIFY THE GENUINENESS OF THE CLAIM, ENQUIRIES WERE CONDUCTED BY THE ASSES SING OFFICER. HOWEVER, SUMMONS ISSUED UNDER SECTION 131 OF THE ACT TO ITSP L AT THE ADDRESS PROVIDED BY THE ASSESSEE COULD NOT BE SERVED AS REPORTEDLY, THE INSPECTOR DEPUTED FOR THE TASK FOUND THE SAID ENTITY TO BE NOT EXISTING AT TH E GIVEN ADDRESS AND THAT IT HAD ALREADY VACATED THE PREMISES ABOUT 12 YEARS BACK. SIMILARLY, IN RESPONSE TO ENQUIRIES CONDUCTED BY THE ASSESSING OFFICER BY CAL LING FOR INFORMATION UNDER SECTION 133(6) OF THE ACT FROM REPUTED CUSTOMERS SU CH AS ABB LTD., SEIMENS LTD., TATA POWER COMPANY ETC., SALES TO WHOM WERE C LAIMED TO BE PROCURED BY ITSPL, THEY REPORTEDLY DENIED HAVING ANY DEALINGS W ITH OR THROUGH ITSPL BUT STATED THAT PURCHASE OF GOODS WERE MADE DIRECTLY FR OM THE ASSESSEE. THE QUERIES RAISED BY THE ASSESSING OFFICER AS WELL AS THE REPLY RECEIVED FROM ONE OF THE PARTIES, NAMELY, ABB LTD. WERE REPRODUCED BY THE ASSESSING OFFICER AT PAGE 3 AND 4 OF THE ASSESSMENT ORDER ON A REPRESENT ATIVE BASIS. THUS, ARMED 3 ITA NO.458/PN/2014 WITH THE REVELATIONS THAT THE ITSPL DID NOT EXIST A T THE GIVEN ADDRESS AND PARTIES FROM WHOM SALES WERE SUPPOSEDLY BROUGHT IN BY ITSPL TO THE ASSESSEE DENIED HAVING ANY AFFAIRS WITH ITSPL, THE ASSESSING OFFICER FORMED A VIEW THAT THAT CLAIM WAS NOT BONA-FIDE AND THE EVIDENCES FURNISHED BY THE ASSESSEE ARE MERELY AIMED AT GIVING A COLOUR OF GENUINENESS TO THE TRANSACTIONS. THE ASSESSEE SOUGHT TO CLARIFY BEFORE THE ASSESSING OFF ICER THAT ITSPL HAD SHIFTED ITS BUSINESS OPERATIONS FROM ITS OFFICE TO NEW PREM ISES LOCATED AT 4 TH FLOOR, KALPATARU SQUARE, ANDHERI KURLA ROAD, MUMBAI. FURT HER, EMPHASIZING ON THE DATA AVAILABLE WITH WEBSITE OF THE REGISTRAR OF COM PANIES CONCERNING ITSPL, THE ASSESSEE SOUGHT TO REASSERT ITS CLAIM THAT THE EXISTENCE AND ITS CAPABILITY TO RENDER SERVICES TO THE ASSESSEE CANNOT BE DOUBTED. SIMILARLY, THE ASSESSEE ALSO SOUGHT TO PLAY DOWN THE DENIALS OF ITS CLIENT OF HA VING ANY ACQUIESCENCE WITH ITSPL BY STATING THAT THE SAME MAY BE OCCASIONED DU E TO CHANGE IN THE CONCERNED PERSONNEL IN HIS CLIENTS OFFICE. THE AS SESSING OFFICER, HOWEVER, BRUSHED-ASIDE VARIOUS EXPLANATIONS MADE BY THE ASSE SSEE AND DISALLOWED THE AFORESAID COMMISSION EXPENSES AND ACCORDINGLY ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED THERETO, THE ASSESSEE CARRIED THE MATT ER BEFORE THE CIT(A). THE CIT(A) OBSERVED THAT ONE OF THE OBJECTIONS OF T HE ASSESSING OFFICER IS THAT ITSPL DID NOT HAVE ANY OFFICE AND PROPER ADDRESS TH EREOF WAS NOT FURNISHED BY THE ASSESSEE. IT WAS NOTED BY THE CIT(A) IN THE AS SESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2009-10, THE ASSESSING OFFICER ONCE AGAIN DEPUTED AN INSPECTOR TO VISIT THE NEW PREMISES OF ITSPL AND ON THE BASIS OF INSPECTORS REPORT DATED 05.12.2011, ALLOWED THE CLAIM OF THE A SSESSEE FOR THAT YEAR. AS REGARD THE SECOND OBJECTION THAT ONE OF THE CLIENTS OF THE ASSESSEE M/S ABB LTD., NASHIK DENIED THE EXISTENCE OF ANY THIRD PART Y SALES/COMMISSION AGENT BY THE NAME OF ITSPL, THE CIT(A) NOTED THAT THE ASSESS EE HAS CORROBORATED THE FACT OF RENDERING SERVICES BY VOLUMINOUS CORRESPOND ENCES BETWEEN THE ASSESSEE AND THE ITSPL FROM WHERE IT IS CLEARLY DIS CERNIBLE THAT THE COMMISSION AGENT HAS RENDERED SERVICES IN THE PROCE SS OF PROCUREMENT OF 4 ITA NO.458/PN/2014 BUSINESS FROM VARIOUS CUSTOMERS OF THE ASSESSEE. T HE CIT(A) AFTER DETAILED ANALYSIS OF THE SUBMISSIONS MADE BY THE ASSESSEE CO NCLUDED THAT THE BONA-FIDES OF THE COMMISSION PAYMENT CANNOT BE DOUBTED. THE R ELEVANT FINDINGS OF THE CIT(A) IS REPRODUCED HEREUNDER :- 6.1. I HAVE GIVEN THE MATTER CAREFUL CONSIDERATION AFTER TAKING INTO ACCOUNT THE OBJECTIONS OF THE ASSESSING OFFICER, THE SUBMISSION S OF THE APPELLANT, THE ADDITIONAL EVIDENCES FILED, THE REMAND REPORT, THE REJOINDER O F THE APPELLANT AND THE CONCLUDING SUBMISSIONS. THE APPELLANT IS IN THE BUSINESS OF M ANUFACTURING AS WELL AS TRADING OF TESTING AND MEASURING EQUIPMENTS FOR THE POWER SECT OR. IT HAS PAID CERTAIN AMOUNTS AS COMMISSION TO VARIOUS PARTIES FOR PROCUREMENT OF BUSINESS ORDERS. HOWEVER, THE ASSESSING OFFICER HAS REJECTED THE GENUINENESS OF T HE TRANSACTION IN RESPECT OF ONLY ONE PARTY NAMELY, M/S INTEGRATED TECHNOLOGY SOLUTIO NS PRIVATE LIMITED (ITSPL) ON TWO ACCOUNTS. THE FIRST BEING THAT ITSPL DID NOT H AVE AN OFFICE AT THE ADDRESS FURNISHED BY THE APPELLANT AND THE SECOND BEING THA T ONE OF THE CLIENTS OF THE APPELLANT, M/S ABB LTD., NASHIK DENIED THE EXISTENC E OF ANY THIRD PARTY SALES AGENT/COMMISSION AGENT BY THE NAME OF ITSPL. THERE FORE, THE ASSESSING OFFICER REACHED THE CONCLUSION THAT IT WAS NOT ESTABLISHED THAT SERVICES HAD BEEN RENDERED BY THE SAID PARTY AND THE CORRESPONDENCE WITH REGAR D TO ITSPL SUCH AS RETAINERSHIP LETTER, TDS COMPLIANCES, LEDGER ACCOUNT COPIES, WER E COLOURABLE DEVICES. 6.2. TAKING UP THE FIRST OBJECTION OF THE ASSESSING OFFICER NAMELY THE INSPECTOR'S REPORT, IT IS NOW CLEAR AND IT WAS ALSO CLARIFIED TO THE ASSESSING OFFICER AT THE FAG END OF THE ASSESSMENT PROCEEDINGS THAT T HE SAID COMPANY HAD SHIFTED THEIR OFFICE FROM NIRLON HOUSE, WORLI, MUMBAI TO 4T H FLOOR, KALPATARU HOUSE, ANDHERI-KURLA ROAD, ANDHERI (EAST), MUMBAI IN SEPTE MBER, 2010. REFERENCE HAS BEEN MADE TO THE ADDRESS AVAILABLE AT TIN-NSDL WEBS ITE WHEREIN THE ANNUAL RETURN OF ITSPL FOR F.Y. 2009-10 INDICATES THE OLD ADDRESS AT NIRLON HOUSE, WORLI, MUMBAI. SIMILARLY, THE ADDRESS OF THE PARTY CONTINU ES TO BE SHOWN AT THE OLD ADDRESS IN THE DEPARTMENT'S WEBSITE KNOW YOUR TAN' EVEN IN NOVEMBER 2011. IT IS AN ESTABLISHED FACT THAT STATUTORY DOCUMENTS LIK E PAN, TAN, ETC ARE ISSUED ON THE BASIS OF ADDRESS PROOF TO BE AUTHENTICATED AND SUBMITTED BY APPLICANTS. FURTHER, THERE IS NO GAINSAYING THAT WHEN THE ITI V ISITED THE NIRLON HOUSE, WORLI, MUMBAI ADDRESS IN DECEMBER 2010, IT WAS OBVIOUS THA T SHE FAILED TO LOCATE THE PARTY AT THE SAID PREMISES. IN THE COURSE OF ASSES SMENT PROCEEDINGS FOR A.Y. 2009- 10, THE ASSESSING OFFICER AGAIN DEPUTED ITI TO VISI T THE NEW PREMISES OF ITSPL AT KALPATARU HOUSE, ANDHERI-KURLA ROAD, ANDHERI (EAST) , MUMBAI AND ON THE BASIS OF THE ITIS REPORT DATED 5.12.2011 (PARA 2.7 OF THE R EMAND REPORT) ALLOWED THE CLAIM OF THE APPELLANT FOR THAT YEAR. THEREFORE, IT IS HE LD, ON THE FACTS NOW AVAILABLE ON RECORD, THAT THE PARTY ITSPL IS AN EXISTING PARTY A ND NOT MUCH CAN BE MADE OUT OF THE FACT THAT THEY WERE NOT AVAILABLE AT THE PREMIS ES INDICATED ON THE BILLS RAISED BY THEM FOR THE IMPUGNED A.Y. 6.3. COMING TO THE OTHER OBJECTION OF THE ASSESSING OFFICER WITH REGARD TO THE REPLY THAT HE RECEIVED FROM M/S ABB LTD. NASHIK, DE NYING THE EXISTENCE OF ANY THIRD PARTY SALES AGENT/COMMISSION AGENT BY THE NAM E OF ITSPL, THE LEARNED AR OF THE APPELLANT HAS ARGUED THAT IN THE INFORMATION SO UGHT BY THE ASSESSING OFFICER FROM THE CLIENTS OF THE APPELLANT, THEY WERE ONLY A SKED FOR THE DETAILS OF THE TRANSACTION MADE I.E. WHETHER THE PRODUCT WAS PURCH ASED DIRECTLY OR THROUGH ANY THIRD PARTY SALES AGENT AND WHETHER THEY WERE AWARE OF THE EXISTENCE OF ITSPL WHO WAS CLAIMING TO BE A PARTY TO THE TRANSACTIONS. IT WAS BUT NATURAL THAT M/S ABB LTD. NASHIK WOULD DENY THE INVOLVEMENT OF ANY AGENT BUT CLAIM, AS THEY HAVE, TO HAVE 5 ITA NO.458/PN/2014 PAID DIRECTLY TO THE APPELLANT SIMPLY BECAUSE ITSPL WAS NOT AN AGENT OF THE CLIENT BUT OF THE APPELLANT. FURTHER, VOLUMINOUS CORRESPON DENCES BETWEEN THE APPELLANT AND ITSPL HAVE BEEN FILED VIDE PAGES A-20 TO A-288 OF THE PAPER BOOK TO INDICATE THE NATURE OF SERVICES RENDERED BY THAT PARTY IN TH E PROCESS OF PROCUREMENT OF BUSINESS FROM VARIOUS CUSTOMERS OF THE APPELLANT. T HESE COULD NOT BE FILED DUE TO THE INSUFFICIENT TIME DURING ASSESSMENT PROCEEDINGS AND HAD BEEN REMANDED TO THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS, TO HI S CREDIT, EXAMINED THE SAME AND IS OF THE VIEW THAT THESE ARE ADMISSIBLE EVIDENCES SINCE THEY FALL WITHIN THE EXCEPTIONS COVERED UNDER CLAUSES (C) AND (D) OF RUL E 46A(1). HIS VIEW, RECORDED AT PARAS 2.8 AND 2.9 OF THE REMAND REPORT, IS THAT MOS T OF THE COMMISSION HAS BEEN PAID TO PARTIES WHO HAVE ALREADY BEEN .FOUND TO BE GENUI NE IN THE COURSE OF ASSESSMENT FOR A.Y. 2009-10, EXCEPT FOR THE TRANSACTIONS RELAT ED TO ABB LTD., NASHIK. AFTER EXAMINATION OF THE DOCUMENTS SUBMITTED AS ADDITIONA L EVIDENCES, COMPRISING OF LETTERS EXCHANGED IN THE COURSE OF BUSINESS BETWEEN ITSPL AND ASSESSEE AND COPIES OF MINUTES OF MEETINGS SIGNED BY BOTH THE PARTIES I .E. THE ASSESSEES REPRESENTATIVE AND SALES AGENTS REPRESENTATIVE IN SOME CASES, ALO NG WITH THE DETAILS OF WORK ORDER SECURED BY THE SAID ITSPL, HE IS OF THE VIEW THAT T HESE DOCUMENTS THROW LIGHT ON NATURE OF SERVICES PROVIDED BY ITSPL TO THE ASSESSE E IN PREVIOUS YEAR RELEVANT TO A.Y. 2008-09. HE IS ALSO IN AGREEMENT THAT THE NET PAYMENT OF RS. 97,00,515/- PAID TO ITSPL EXCLUDING THE SERVICE TAX, EDUCATION CESS, S & H EDUCATION CESS COMPONENT OF RS. 11,98,984/-, NEEDS TO BE CONSIDERED IF ANY D ISALLOWANCE IS TO BE SUSTAINED SINCE THAT AMOUNT HAS NOT BEEN DEBITED TO THE PROFI T & LOSS ACCOUNT BUT REFLECTED IN THE BALANCE SHEET AS CURRENT ASSET UNDER SCHEDULE-7 (LOANS & ADVANCES) AS CENVAT CREDIT. 6.4. THUS, IT CAN BE SEEN THAT THERE IS SUFFICIENT EVIDENCE NOW PRODUCED BEFORE THE ASSESSING OFFICER THAT SERVICES HAVE ACTUALLY B EEN RENDERED. IN SO FAR AS THE SERVICES VIS-VIS ABB LTD., NASHIK IS CONCERNED, IT IS SEEN FROM PAGES A-90 TO A-93 OF THE PAPER BOOK THAT THE APPELLANT WAS INFORMED O F THE REQUIREMENT FOR CIRCUIT BREAKER TEST SYSTEM FROM THE SIDE OF ABB LTD., NASH IK VIDE ITSPL LETTER DATED 26.09.2007, FOLLOWING WHICH THE APPELLANT'S SALES E NGINEER SHRI RAJESH PARDESHI VISITED ABB LTD., NASHIK AND DISCUSSED THEIR TESTIN G REQUIREMENT, WHICH TURNED OUT TO BE A MOUNTED TEST SYSTEM WHICH CAN BE MOVED ON THE SHOP FLOOR AS WELL AS OUTSIDE THE SHED. ON 23.10.2007, HELD BETWEEN IT SPL AND THE APPELLANT COMPANY, VARIOUS TESTING OPTIONS WERE DISCUSSED AND INSTEAD OF A TEST SYSTEM ON 42 U DIN STANDARD RACK WITH CASTERS FOR MOVEMENT, W HICH WOULD HAVE TOPPLING PROBLEMS, IT WAS RECOMMENDED BY ITSPL THAT A TABLE TOP TEST SYSTEM SHOULD BE OFFERED WHICH WOULD BE MORE STURDY WHILE OPERATING INSIDE AND OUTSIDE THE SHOP FLOOR. THE PRICING OF THE TESTING SYSTEM WAS ALSO D ECIDED BASED ON THE RECOMMENDATION OF ITSPL. BASED ON THIS, THE PURCHAS E ORDER NO. 3091001124 DATED 29.10.2007 WAS RECEIVED FROM ABB LTD., NASHIK , SIMILARLY, IT IS SEEN FROM PAGES A-94 TO A-102 OF THE PAPER BOOK THAT THE APPE LLANT WAS INFORMED OF THE REQUIREMENT FOR AUTOMATED TEST SYSTEM FOR TESTING C IRCUIT BREAKERS FROM THE SIDE OF ABB LTD., NASHIK VIDE THEIR ENQUIRY LETTER IN WH ICH THEY WERE TO PROVIDE ADDITIONAL HARDWARE AND SOFTWARE FOR TESTING RMU AN D AUTO RECLOSURE. THIS WAS COMMUNICATED TO ITSPL FOR DEVELOPING A SOFTWARE PAT CH FOR RMUS VIDE APPELLANT COMPANYS LETTER DATED 18.08.2007. SEVERAL CORRESP ONDENCES ARE SEEN TO BE EXCHANGED BETWEEN THE TWO PARTIES AFTER RECEIPT OF THE PURCHASE ORDER NO.3091001395 DATED 27.11.2007, FOR DEVELOPMENT AND DESIGN OF SOFTWARE PATCH FOR TESTING RMU AND AUTO RECLOSURE TILL THE ISSUE WAS R ESOLVED. SIMILAR CORRESPONDENCE IN RESPECT OF PROCUREMENT OF ORDERS FROM OTHER PARTIES, SUCH AS NTPC, SINGRAULI, L & T, CHENNAI, PGCIL, BANGALORE, DMRC, DELHI, NTPC, DADRI, TATA POWER COMPANY, MUMBAI, ETC. IT IS CLEAR FROM T HESE CORRESPONDENCES AND FROM THE ARGUMENTS OF THE LEARNED AR, THAT THE AGEN T-PRINCIPAL RELATIONSHIP WAS 6 ITA NO.458/PN/2014 BETWEEN ITSPL AND THE APPELLANT AND NEITHER ABB, NA SHIK NOR ANY OF THE APPELLANT'S CLIENTS WERE PRIVY TO THIS CONTRACT. TH E AR'S ARGUMENT THAT THE RESPONSIBILITY OF ITSPL WAS TO PROCURE THE BUSINESS ORDERS AND PROVIDE SUPPORT SERVICES TO THE CUSTOMERS ALWAYS FOR AND ON BEHALF OF THE APPELLANT AND THEREFORE, THERE IS NO QUESTION OF ITSPL TO REVEAL THEIR INDEPENDENT IDENTITY TO THOSE FROM WHOM THEY HAVE PROCURED ORDERS FOR AND O N BEHALF OF THE APPELLANT COMPANY, IS WELL-FOUNDED. FROM THE FACTS DISCUSSED SUPRA, IT IS WELL ACCEPTED THAT SINCE ITSPL WAS PROVIDING SERVICES TO THE APPELLANT COMPANY AND NOT TO ABB LTD, THERE WAS NO REASON FOR ABB LTD. TO MAINTAIN ANY RE CORD OR DOCUMENTATION IN RESPECT OF ITSPL. 6.5. THE AR HAS ARGUED THAT AGAINST A GROSS REVENUE OF RS. 13,25,25,397/-, THE APPELLANT HAD PAID COMMISSION OF RS. 1,09,65,073/- IN THE AGGREGATE WHICH WORKS OUT TO 8.27% OF THE GROSS RECEIPTS AND WHICH IS REASONABLE. FURTHER, THE RELATIONSHIP OF AGENT-PRINCIPAL BETWEEN ITSPL AND T HE APPELLANT COMPANY IS SEEN TO BE EXISTING RIGHT FROM F.Y. 2004-05 AND COMMISSI ON HAS BEEN CONSISTENTLY PAID AT 17.5% SINCE THAT YEAR THROUGH TO F.Y. 2009-10, A S PER THE FOLLOWING FIGURES FURNISHED BY THE AR: F.Y. COMMISSION CHARGE ON EX- WORKS VALUE OF ORDER BOOKED COMMISSION AMOUNT SERVICE TAX & OTHER CESS GROSS COMMISSION 2004-05 1,45,92,663/- 25,53,716/- 2,60,480/- 28,14,196/- 2005-06 3,43,87,145/- 60,17,750/- 6,13,813/- 66,31,563/- 2006-07 3,63,26,398/- 63,57,120/- 7,78,111/- 71,35,231/- 2007-08 5,54,31,508/- 97,00,514/- 11,98,984/- 1,08,99,498/- 2008-09 97,03,615/- 16,98,133/- 2,09,890/- 19,08,023/- 2009-10 1,36,78,800/- 23,93,790/- 2,46,561/- 26,40,351/- 6.6. IT IS ALSO SEEN FROM THE RECORD THAT EVEN IN T HE SUBSEQUENT A.Y.S 2009-10 AND 2010-11, THE APPELLANT'S CASE WAS SELECTED FOR SCRUTINY AND THE RESPECTIVE ASSESSING OFFICERS HAVE, AFTER DUE VERIFICATION, AC CEPTED THE SALES COMMISSION PAID TO ALL THE PARTIES BY THE APPELLANT, INCLUDING ITSPL. THIS CERTAINLY CORROBORATES THE FACT THAT THE SERVICES HAVE BEEN R ENDERED BY THE SAID PARTY AND THE PAYMENTS MADE TO THEM IN CONSIDERATION FOR SERVICES RENDERED ARE GENUINE. THE FACTS ARE ALSO SEEN TO BE DISTINGUISHABLE FROM THE FACTS BEFORE THE DELHI HIGH COURT IN THE CASE OF SCHNEIDER ELECTRIC INDIA LTD. VS CIT REPORTED IN 171 TAXMAN 177, WHEREIN THERE WAS NO EVIDENCE OF ANY CORRESPON DENCE OR ANY PERSONAL MEETINGS, ETC BETWEEN THE ASSESSEE AND RAM AGENCIES (NAME OF THE PARTY TO WHOM COMMISSION WAS PAID), TO SUGGEST THAT THERE WA S ANY RELATIONSHIP ON THE BASIS OF WHICH RAM AGENCIES PROCURED SOME ORDERS OF THE ASSESSEE FOR WHICH IT IS ENTITLED TO RECEIVE COMMISSION. THE APPELLANT HAS A LSO PRODUCED INDEPENDENT EVIDENCES REGARDING THE GENUINENESS OF THE COMMISSI ON AGENT NAMELY, THE ANNUAL RETURN OF ITSPL FOR THE YEAR ENDING 31-03-20 10, WHICH WERE OBTAINED FROM THE APPELLANT FROM REGISTRAR OF COMPANIES (ROC ) AND WHICH CONTAINS THE REGISTERED ADDRESS OF THE COMPANY AS THE ONE WHERE THE INSPECTOR HAD VISITED ON 03-12-2010, THE FINANCIAL STATEMENTS OF THE SAID IT SPL CLEARLY REFLECTING THE AGGREGATE COMMISSION INCOME OF RS.10.98 CRORES AS A GAINST RS.0.97 CRORES PAID TO IT BY THE APPELLANT, CHALLANS EVIDENCING THE PAY MENT OF SERVICE TAX BY ITSPL TO THE GOVERNMENT IN RESPECT OF INVOICES RAISED BY IT TO THE APPELLANT, ETC., WHICH HAVE NOT BEEN DOUBTED BY THE ASSESSING OFFICER IN T HE REMAND PROCEEDINGS. 7 ITA NO.458/PN/2014 6.7 CONSIDERING THE ENTIRE CONSPECTUS OF EVIDENCES PRODUCED AND EXAMINED DURING REMAND PROCEEDINGS, AND THE DISCUSSION ON TH E ISSUE AT PARAS 6.1 TO 6.6 SUPRA, IT IS HELD THAT THERE IS NO REASON FOR THE D ISALLOWANCE OF THE COMMISSION PAID TO ANY OF THE PARTIES, INCLUDING ITSPL DURING THE P REVIOUS YEAR RELEVANT TO THE A.Y. 2008-09. THEREFORE, IN THE LIGHT OF THE ABOVE FIND ING, GROUNDS OF APPEAL 1 TO 6 STAND ALLOWED. 5. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 6. THE LD. AUTHORIZED REPRESENTATIVE (AR) FOR THE A SSESSEE, SHRI ANIL SATHE, ON OTHER HAND, SUBMITTED THAT IN THE IDENTIC AL CIRCUMSTANCES, THE ASSESSING OFFICER HAD ACCEPTED THE FACTUM OF COMMIS SION EXPENDITURE WITH REFERENCE TO THE SAME PARTY I.E. ITSPL RELEVANT TO ASSESSMENT YEAR 2009-10 AND 2010-11 AFTER MAKING PROPER ENQUIRIES. HE ADVERTED OUR ATTENTION TO THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2009-10 DA TED 20.12.2011 FILED AT PAGE NO.45 OF THE PAPER BOOK AND SUBMITTED THAT THE DISALLOWANCE OF COMMISSION PAID TO ITSPL IN THE ASSESSMENT YEAR 200 8-09 WAS SPECIFICALLY DELIBERATED UPON BY THE ASSESSING OFFICER IN THE AF ORESAID ASSESSMENT ORDER AND AFTER CONSIDERATION OF THE RELEVANT RECORDS, TH E ASSESSING OFFICER ACCEPTED THE CLAIM OF THE ASSESSEE AS GENUINE AND CORRECT. SIMILARLY, COMMISSION EXPENSES WERE ALSO ALLOWED IN THE ASSESSMENT FRAMED UNDER SECTION 143(3) OF THE ACT FOR ASSESSMENT YEAR 2010-11. THE LD. AR AC CORDINGLY EXHORTED THAT ON THE FACE OF SUCH FINDINGS OF THE ASSESSING OFFIC ER HIMSELF IN THE SUBSEQUENT ASSESSMENT YEARS, THE BASIS FOR DISALLOWANCE BY ASS ESSING OFFICER DOES NOT SURVIVE. THUS, THERE IS NO REASON TO INTERFERE WIT H THE ORDER OF THE CIT(A). 7. WE HAVE CAREFULLY CONSIDERED RIVAL SUBMISSIONS. WE FIND THAT IT IS NOT IN DISPUTE THAT THE COMMISSION EXPENSES INCURRED WITH REFERENCE TO THE IMPUGNED COMMISSION AGENT NAMELY ITSPL HAS BEEN DULY ACCEPTE D BY THE ASSESSING OFFICER ON SIMILAR FACTS AFTER MAKING PROPER ENQUIR IES IN THE SUBSEQUENT ASSESSMENT YEARS. WE FIND THAT THE ORDER OF THE CI T(A) IS WELL REASONED WITH 8 ITA NO.458/PN/2014 WHICH WE FULLY AGREE. THUS, WE DO NOT INTEND TO RE ITERATE THE SAME. HENCE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A). 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON THIS 27 TH DAY OF MAY, 2016. SD/- SD/- ( SUSHMA CHOWLA ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE ; DATED : 27 TH MAY, 2016. % & '() *)' / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-III, PUNE; 4) THE CIT-III, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %+ / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE